vs. ) Case No. 03-0143
Respondent. )
This case was heard by David M. Maloney, Administrative Law Judge of the Division of Administrative Hearings, on March 7, 2003, by video teleconference at sites in Fort Lauderdale and Tallahassee. The Administrative Law Judge and counsel for the Department of Financial Services were at the site in Tallahassee. Petitioner, appearing pro se, and the court reporter were at the site in Fort Lauderdale.
9022 West Atlantic Boulevard, No. 227 Coral Springs, Florida 33065
Whether Petitioner should be licensed as a title agent by the Department of Financial Services?
By letter to the Division of Administrative Hearings dated January 16, 2003, the Department of Financial Services ("Department") requested that an administrative law judge be assigned to consider a Notice of Denial issued in the matter of Shirley Auxais, DOI Case No. 64774.
Attached to the letter were both a copy of the notice and a request for hearing submitted by Ms. Auxais on an "Election of Proceeding" form. The Notice of Denial set out a factual basis for denial of Ms. Auxais' application for a license as a title agent and cited a number of statutory provisions the application of which demanded, in the Department's view, denial of the application or provided discretion to the Department to deny the application.
Ms. Auxais checked the box that contains, in part, the following, "I do dispute one or more of the Department's factual allegations. I hereby request a hearing pursuant to Section 120.57(1), Florida Statutes, to be held before the Division of Administrative Hearings."
On January 17, 2003, the case was assigned DOAH Case No.
03-0143 and an administrative law judge (other than the undersigned) was designated by DOAH to conduct the proceedings. Prior to the commencement of final hearing, the case was transferred to the undersigned administrative law judge.
In the "Notice of Rights" section of the Notice of Denial dated November 14, 2002, the following appears:
Notice of Denial, November 14, 2002, page 4 of 5. Ms. Auxais chose to appear at the hearing pro se. Ms. Auxais presented her own testimony; she presented no other witnesses and offered no other evidence, documentary or otherwise. The Department offered nine exhibits, identified as Respondent's Exhibits numbered 1-9. All were admitted into evidence.
Ms. Shirley Auxais, the Petitioner, was born on November 20, 1971, in Brooklyn, New York. She is presently a resident of Coral Springs, Florida. Formerly married,
Ms. Auxais' married name was Shirley A. Seraphin.
The Department of Financial Services, the Respondent, was created by the Florida Legislature in the 2002 Session. Section 20.121, Florida Statutes. It is responsible for taking action on the license application submitted by Ms. Auxais and has been substituted as the Respondent in this proceeding for the Department of Insurance, the agency that issued the notice of denial. See B., 1Note to Section 120.121, Florida Statutes (2002), p. 400.
Unemployment Compensation Fraud
On February 17, 1998, the State Attorney of the Seventeenth Judicial Circuit filed an information against
Ms. Auxais for unemployment compensation fraud, a felony. See Section 443.071(1), Florida Statutes. At the time of the filing, Ms. Auxais' name was Shirley A. Seraphin.
The information charged the following:
Shirley A. Seraphin from on or about the 13th day of August, A.D., 1995 up to and including the 16th day of September A.D., 1995, . . ., did . . . make a false statement or representation on her Pay Order Card(s), Florida Department of Labor Form UCB60 and/or UCB61, knowing said statement or representation to be false, or knowingly failed to disclose a material fact to obtain or increase benefits or other payments for her or any other person, in that the said Shirley A. Seraphin did knowingly state on her pay order cards that she was unemployed and not earning wages during the aforesaid period, when in fact and truth she was employed . . ., and earning wages which she willfully failed to report, and the said
false statement was made or material fact not disclosed with the intent to obtain or increase benefits pursuant to the Florida Unemployment Compensation Law
Respondent's Exhibit 3.
Ms. Auxais, in the Circuit Court of the 17th Judicial Circuit, in and for Broward County (the "Court") entered a plea of "No Contest" to the charges.
On June 18, 1998, Ms. Auxais upon the motion of the State, was ordered by the Court to pay restitution to the Division of Unemployment Compensation "in the total sum of Eight hundred twenty-five and 00/100 ($825)." Respondent's Exhibit 5.
On June 18, 1998, an Order of Probation was rendered by the Court in Ms. Auxais' case pursuant to a plea of nolo contendere to Unemployment Compensation Fraud as reflected on the face of the order. Adjudication of guilt was withheld and
Ms. Auxais was placed on "18 months mail in probation." Respondent's Exhibit 6.
Slightly more than four months later, an order was entered by the Court that terminated Ms. Seraphin's probation.
Application for Licensure as a Title Agent
On May 13, 2002, Ms. Auxais submitted an application for a new license as a title agent to the Department of Insurance's Bureau of Agent and Agency Licensing. The license applied for,
according to the application is "04-10-Resident Title Agent." Respondent's Exhibit 2, p. 7.
The application poses a number of screening questions.
Two are immediately adjacent to each other in the order that follows:
In the past 12 months, have you been arrested, indicted, or had an information filed against you or been otherwise charged with a crime by any law enforcement authority anywhere in the United States or its possessions or any other country.
Have you ever been charged, convicted, found guilty or pled guilty or nolo contendere (no contest) to a crime under the laws of any municipality, county, state, territory, or country, whether or not adjudication was withheld or a judgment of conviction was entered.
Respondent's Exhibit 2, p. 8. The answer shown on the application to both questions is "N" which stands for "no."
Six months later, on November 14, 2002, the Notice of Denial was issued.
The factual basis for the denial consists of two interrelated facts. First, Ms. Auxais responded "no" to the question of whether she had ever pled no contest to a crime. Second, Ms. Auxais had pled no contest to Unemployment Compensation Fraud, a felony, in the Circuit Court in and for Broward County.
Explanations
In the interim between the submission of the application and the denial, Ms. Auxais, in a letter to a Regulatory Consultant at the Department of Insurance, offered "explanations . . . in regard to the cases filed against [her] . . .". Respondent's Exhibit 9, page 25.
The first explanation concerns a criminal charge of "larceny by credit card." The charge is not related to the Department's basis for denial. Nonetheless, the explanation sheds light on Ms. Auxais' credibility. It has value to this case, moreover, because Ms. Auxais chose in her testimony at hearing to explain further her written explanation. She did so as she attempted, at the same time, to explain away the false answer on her application with regard to the nolo contendere plea for Unemployment Compensation Fraud, the second explanation in her letter in November of 2002 to the Department of Insurance.
The explanation to the unrelated charge (the first explanation offered in the letter to the Department of Insurance)
follows:
Arrest Date: 3/13/95. Charge: Larceny Credit Card
I went shopping with an ex-associate. I was not aware of the fact that she had obtained a credit card and attempted to use it unlawfully. When security began to question the nature of the card she fled the scene and I was held, arrested and charged for Larceny Credit Card. I explained the nature of the
incident to the defense attorney appointed to me who suggested I plead no-contest. The courts ruled adjudication withheld.
(Respondent's Exhibit 9). With regard to a question about whether her ex-associate had ever been charged with some type of theft crime for the incident, Ms. Auxais testified, "No she was never found. I can't find her to this day." (Tr. 44, 45).
The second explanation relates to the felony of Unemployment Compensation Fraud:
Arrest Date: 4/29/98 Charge: Fraud/Unemployment
I worked for a group of physicians one of whom split from the group. At that time the other physicians felt threatened since I worked directly for the physician who decided to leave and I got fired.
During this time I filed for unemployment. While I was on unemployment and receiving benefits the physician gave me a gift (so I thought) in the sum of $400.00. I was not aware that her accountant documented the
$400.00 as employment. Some months later after she re-opened her new practice and I resumed working for her I among other employees received a letter from the unemployment office notifying us of unemployment fraud and they demanded repayment of the monies I received in the amount of $800.00. When I explained the situation to the physician she agreed to repay unemployment. I set up a payment plan with unemployment however the physician's accountant did not keep up with the payment which caused me to get arrested for unemployment fraud.
(Id.)
At hearing, in the midst of elaborating on these two explanations, Ms. Auxais offered an explanation for how it happened that her application had been submitted with the false answer of "no" to the screening question of whether she had ever pled "no contest" to a crime when, in fact, she had pled nolo contendere or no contest to crimes twice. Her explanation in this regard was:
I personally did not fill out the application for the title insurance thing on line.
My supervisor did it for me[.] [A]t the time that the application was filled out for me on line[,] I was in title insurance training in Tampa . . . But you just don't go around telling everybody that yes I was charged with unemployment compensation fraud after you thought everything was done.
I guess the person who filled out the application for me was not aware that I was charged with a felony, so when the question was asked, had I ever been charged with a felony, they checked no. When it came back, I had already signed the last page of that prior to leaving, because you can actually print out the application. The application was sent out with that.
(Tr. 30). Before transmitting it to the Department of Insurance, Ms. Auxais did not read the filled-out application. She testified she did not have the opportunity to so "[b]ecause [she] was in the midst of trying to go out of town and [she] was in the midst of trying to get [the] application out for a
deadline . . .". (Tr. 64).
There are at least two problems with this explanation.
Both relate to the declaration that appears above the signature line in the application:
Under penalties of perjury, I declare that I have read the foregoing application for licensure and that the facts stated in it are true.
Respondent's Exhibit 2, p. 000011 of Respondent's Exhibits. If Ms. Auxais is to be believed, she had not, in fact, read the application with answers before signing it so that her attestation by way of her signature was false. The other problem occurs with her reading of the application after it had been signed, filled out, sent in and discovered by the Department of Insurance to be false. On this point, Ms. Auxais had yet another explanation.
This explanation has as its basis Ms. Auxais' reading of the two screening questions quoted in paragraph 10, above.
The first of the two has a time frame with regard to the question it asks about criminal arrests or charges. "In the past 12 months," is the predicate to the question. The second question, has no such time limitation. It asks whether the applicant has "ever" pled nolo contendere or no contest to a crime. When confronted by a Department of Insurance employee, "a Mr. Thomas" with the false answer to the second question, Ms. Auxais testified, "I . . . explained to him that even after going back
and re-reading everything I would have still said no because the prior question asked within the past 12 months." (Tr. 60, 61). In other words, Ms. Auxais construed the second question to be limited by the time frame of the first so that contrary to its plain inquiry as to whether she had "ever" pled nolo contendere or no contest to a crime, it really asked whether she had so pled within the previous 12 months.
Ms. Auxais is a college graduate. She plans to continue her education post-graduate by attending law school and regards employment as a licensed title insurance agent as a stepping stone to a career in law.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.
As an applicant for a license as a title insurance agent, Ms. Auxais bears the burden of proving entitlement to the license. Florida Department of Transportation v. J.W.C. Co.,
Inc., 396 So. 2d 778 (Fla. 1st DCA 1981). Ms. Auxais must show by a preponderance of the evidence that she meets all relevant statutory criteria to satisfy this burden. Department of Banking and Finance v. Osborne Stern and Company, 670 So. 2d 932, 934 (Fla. 1996).
Section 626.611, Florida Statutes, states, in pertinent part, that "[t]he Department shall deny an application for . . . agent . . . if it finds that as to the applicant . . . any one or more of the following applicable grounds exist:
Lack of one or more of the qualifications as specified in this code . . . .
Material misstatement, misrepresentation, or fraud in . . .
attempting to obtain the license or appointment.
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(7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
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(14) Having . . . pleaded . . . nolo contendere to a felony . . . under the law of the United States of America or of any state thereof . . . which involves moral turpitude without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases.
Section 626.621, Florida Statutes, provides, "[t]he Department may, in its discretion, deny an application for . . . agent . . . if it finds that as to the applicant . . . any one or more of the following applicable grounds exist under circumstances for which such denial . . . is not mandatory under s. 626.611:
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(8) Having . . . pleaded . . . nolo contendere to a felony . . . under the law of the United States of America or of any state thereof, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases.
Among the differences between Sections 626.611 and 626.621, Florida Statutes, is that the former requires denial of petitioner's application for licensure if the felony to which Ms. Auxais pled guilty involves moral turpitude while the latter gives the Department discretion to grant or deny Ms. Auxais' application if the felony at issue in this case, unemployment compensation fraud, is one that does not involve moral turpitude. For a discussion of the two statutory sections, see Paisley v. Department of Insurance, 526 So. 2d 167 (Fla. 1st DCA 1988) in which the court held that regardless of whether the crime involved is a felony involving moral turpitude, the Department may take action authorized by the statute if the term "lack of fitness or trustworthiness to engage in the business of insurance" covers the criminal activity in the applicant's or licensee's background.
There is one other statutory provision at issue, Section 627.8417, Florida Statutes. It provides, in pertinent part: "(1) A person may not act as a title insurance agent. . . until a valid title insurance agent's license has been issued to that person." The statute goes on in subsection (3) to state
that a license as a title agent shall not be granted to "any individual found by [the Department] to be untrustworthy . . .".
The Department argues that "unemployment compensation fraud" is a crime that involves moral turpitude. See Natelson v. Department of Insurance, 454 So. 2d 31, 31 (Fla. 1st DCA 1984), involving a crime other than unemployment compensation fraud but cited by the Department as authority for its stance here.
Ms. Auxais has offered no counter argument. Ms. Auxais, rather, has taken the tack of trying to explain away her involvement in the crime, as well as the crime of "larceny by credit card" and the mis-handling of her application. Her explanations, together with the remainder of her testimony are wholly lacking in credibility especially when considered together. It is possible that one could be wrongfully convicted of "larceny by credit card" simply because of one's presence with the actual perpetrator who has fled the scene; but it is not likely.
Ms. Auxais' story on this point, moreover, is not believable in the context of all of her other explanations. That she simply followed her defense attorney's suggestion to plead nolo contendere because an unnamed perpetrator had fled never to be seen again becomes less likely in view of her testimony that her former employer's accountant is to blame for her plea to "unemployment compensation fraud." The testimony becomes more difficult to accept in light of her attestation by signature to
an application unread by her, downloaded from the internet and filled out for her by others despite the clear information about the meaning of signing it.
Ms. Auxais did not help her case at the end of testimony when she protested that only then did she realize the seriousness posed by the Notice of Denial. Pending for many months, the notice had been followed by statements provided to her in writing of her rights, including the right to be represented by counsel, referral of the case to the Division of Administrative Hearings, and the many pleadings and notices that followed replete with legal information including a notice that she should appear before an administrative law judge for a formal hearing.
During her testimony, furthermore, Ms. Auxais offered a multitude of excuses for her misfortunes. In blaming others (including the Department's attorney) for outcomes for which she bore personal responsibility, Ms. Auxais clearly and convincingly demonstrated that she is unfit and untrustworthy to hold a license. By her own testimony, as the Department points out, it was established that the manner in which she handled the application at issue demonstrates her unfitness for the license she seeks:
By Petitioner's testimony, it can be argued that she was either careless in completing her application or did not take the
application process seriously. [b]ut
whatever Petitioner's thought process during the completion of the application ,
Petitioner did not carefully read the application. This careless reading . . .
puts Petitioner's fitness to hold a title agent license in doubt. Title agents are charged with the responsibility to read and research the title(s) on property. Within that responsibility, the Department tests applicants on their knowledge of deeds, mortgages, homestead, probate, bankruptcy,
corporations, trusts, judgments and liens and other complex issues involving property law. An applicant needs to be extremely detail- oriented and thorough in order to competently research titles. Although completing a license application is a simple task, Petitioner's careless handling of the application reflects poorly on her fitness to hold a very complex license in title insurance.
(Respondent's Proposed Recommended Order, p. 11).
In sum, Ms. Auxais pled nolo contendere to a felony under the law of the State of Florida. She made a material misstatement about that crime in her attempt to obtain a license as a title insurance agent. She has demonstrated lack of fitness or trustworthiness to engage in the business of insurance by her handling of her application and by her testimony in final hearing on the circumstances that led to the preliminary denial of that application.
Clearly, Ms. Auxais' application should be denied pursuant to Sections 626.621 and 626.8417, Florida Statutes. The Department, moreover, is mandated by Section 626.611, Florida
Statutes, to deny her license because of the material misstatement that Ms. Auxais made on her license regarding her plea to unemployment compensation fraud.
Whether or not unemployment compensation fraud under the facts of Ms. Auxais' commission of it involves moral turpitude, there are ample grounds, one that is mandatory and others that are discretionary, for the Department to deny her application. The issue of moral turpitude, therefore, is of little moment; the Department should deny the application at issue in this case. As recognized by the Department in the presentation of its case and its Proposed Recommended Order, it would be remiss to do otherwise.
Based on the foregoing findings of fact and conclusions of law, it is recommended that a final order be entered denying Petitioner's application for licensure as a title insurance agent.
DONE AND ORDERED this 28th day of April, 2003, in Tallahassee, Leon County, Florida.
DAVID M. MALONEY
Filed with the Clerk of the Division of Administrative Hearings this 28th day of April, 2003.
9022 West Atlantic Boulevard, No. 227 Coral Springs, Florida 33065
Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
